Mirror trades, Russia, Money Laundering, Rogue Trader

Discussion in 'Wall St. News' started by nitro, Oct 3, 2016.

  1. I don't think this particular scheme was counting on a loss in one account and a gain in the other. It sounded like the whole transaction happened almost instantaneously and poof the money was transferred.

    I'm starting to think the accounts were somehow linked where once the shares were bought in the Russian account the shares themselves were transferred to the BVI account electronically. Then they were sold for USD.
     
    #11     Oct 3, 2016
  2. qxr1011

    qxr1011

    this story reminds me about another one

    when during "Souz-Appolo" program Russian space agency and NASA first started cooperation, one American engineer explained to his Russian counterpart about how much efforts was spent to create the pressurized ballpoint pen to work in space, and then he asked the Russian how did they resolve the same problem , no problem said Russian, we just used the pencil
     
    #12     Oct 3, 2016
    ajcrshr likes this.
  3. dealmaker

    dealmaker

    He looks to be the sacrificial lamb just like Fabrice Tourre was at Goldman...
     
    #13     Oct 3, 2016
  4. wintergasp

    wintergasp

    No, the central bank in russia doesn't allow you to move money out like this.

    Even the bank needs to justify money they take out and there's no way that the central bank would have allowed 10Bn like this.

    The problem is similar in Ukraine, India, West Africa etc. etc. I've heard pitches about similar schemes since 2012 from clients of the fund I work for.
     
    #14     Oct 3, 2016
  5. zdreg

    zdreg

    Columbia University offers a graduate degree in financial engineering,
     
    Last edited: Oct 3, 2016
    #15     Oct 3, 2016
  6. i960

    i960

    How is this not just a typical wash trade scheme?
     
    #16     Oct 3, 2016
  7. I didn't find a clear explanation of the way they were moving cash, but my best guess is the bank was deliberately marking up the Russian side and marking down the USD side so the money, less their fees, ended up in the USD account. Just being long in one current and short the same stock in another will move currency as the stock moves, but it could just as easily move it the wrong way.
     
    #17     Oct 4, 2016
  8. wintergasp

    wintergasp

    My understanding of the russian currency issue is that the central bank of russia needs to approve any money that leaves the country. That also applies to banks. So Deutsche need to tell the central bank "we have a linked account that's selling for 10m$ and that's why we need to transfer 10m$ of Deutshe's money outside of the country".

    Otherwise, Deutsche doesn't have the money in the BVI, technically, there's no SWIFT or whatever.
     
    #18     Oct 4, 2016